While some people have argued that the Internet is going to replace insurance agents, it appears that right now, for most carriers, the Web is being used as an easier way for customers to find an agent. In its report-The Internet and Property-Casualty Insurance: Lost in Cyberspace-Conning & Co. looked at developing direct online sales capabilities and found that the most popular task being offered on the Web is locating an agent.
Conning looked at three aspects of the P&C world: personal auto, homeowners, and commercial lines. It examined the Web sites of the top 20 personal-and commercial-lines insurers based on net written premium for 1999. Not surprisingly, more online work is being done in personal auto than the other two catagories. Twenty percent of auto carriers offer online sales with the more complicated homeowners policies available from just five percent of the insurers surveyed. Surprisingly, online commercial sales are available in 15 percent of the insurance Web sites, although these are usually smaller policies.
Finding an agent and helping that agent generate leads are the leading properties of insurance carriers' Web sites. Lead generation through instant quoting is available from 30 percent of auto insurers, only 15 percent of homeowners, and not at all for commercial lines. In its report, Conning said that insurers are holding back on homeowners quotes because it is difficult enough to get personal auto quotes online. Companies want to get one thing done right before trying to do too much, and personal auto offers the most potential. They also believe that managing homeowners online is more difficult, especially when inspections are required.
Not many companies are doing much more online than helping customers find an agent to handle their policy needs. In fact, the main function of 25 percent of personal auto Web sites is to help locate an agent. It's even higher for homeowners (45 percent), and commercial lines (50 percent). Of course that beats the 10 percent of commercial lines insurers who are doing absolutely nothing on the Web.
Conning thinks that insurers could eventually develop specific products for the Internet. The report states: “If, as seems likely, the Internet represents a distinct market with specific product needs, those insurers that tailor products specifically for that market are much more likely to be successful.”
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